The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 (Cth) (‘the Act’) makes significant changes to the Fair Work Act 2009 (Cth). These legislative changes apply to all employers, companies and employees covered by the Fair Work Act, including certain franchisors.
These reforms aim to address widespread community concern identified in a range of Government Reports and FWO investigations into 7-Eleven and Caltex Australia concerning the exploitation of vulnerable workers (such as, visa holders, students and employees under 25 years) through the underpayment or coercion of workers.
The five key changes include:
1. Increased Penalties for record-keeping failures
Individuals – 'Serious contraventions' will be pursued where a person has 'knowingly contravened' a civil remedy provision and the person’s conduct was part of a 'systematic pattern of conduct' relating to one or more persons.
In determining a systematic pattern of conduct, a court may take into account: the number of contraventions; the period over which the contraventions occurred and the person’s response (or failure to respond) to any complaints made about the relevant contraventions.
Corporations – A corporate entity will knowingly contravene a civil remedy provision if the corporate entity 'expressly, tacitly or impliedly authorised the contravention'.
In major changes, the civil penalties for serious contraventions have increased from 60 penalty units up to 600 penalty units. The maximum penalty for corporate entities is $630,000 and $126,000 for individuals for each breach.
2. Reverse onus of proof for unpaid wages claims
An employer must make and keep employee records for 7 years (such as wage records). The employer now bears the burden of disproving allegations in proceedings relating to contraventions of these civil remedy provisions, which also extends to failing to make a record available for inspection or to give a pay slip.
3. Liability of franchisors and holding companies
Franchisors and holding companies could be held responsible if their franchisees or subsidiaries don’t follow workplace laws including requirements to provide minimum wages, apply the National Employment Standards, comply with industrial awards, or maintain required records such as pay slips.
A franchisor will be found to be a 'Responsible Franchisor Entity' if the following components are met:
A court may have regard to a non-exclusive list of factors included in the Act, when determining whether a Responsible Franchisor Entity took "reasonable steps" to prevent a contravention by the franchisee of the same or of similar character. These factors include:
4. Investigative and enforcement powers of the FWO
The evidence-gathering powers of the Fair Work Ombudsman have been strengthened to also include the delegation of powers to other staff of the FWO.
There are further increased penalties for intentionally hindering or obstructing Fair Work inspectors in performing their functions or exercising their powers, and for making and keeping a record or providing a payslip that is false or misleading.
A person is not excused from giving information, producing a record or document, or answering questions on the ground that it might incriminate them or expose them to a penalty or other liability.
5. Prohibition on unreasonable requirements
In targeting cashback schemes, the new reforms also expressly prohibit employers from directly or indirectly requiring an employee (including prospective employees) to spend, or to pay to the employer or another person, an amount of the employee’s money or the whole or any part of an amount payable to the employee in relation to the performance of work, if:
Any company that holds a franchise or similar licensing arrangement must act now to protect itself from the new laws, by:
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